Taking his place is Y-Combinator partner Sam Altman, who will lead the organization's next batch of entrepreneurs. Graham said he will continue to hold office hours to advise startups, but Altman will take over the day-to-day of running YC. Altman founded Loopt, a mobile location-based application developer that he later sold. He was one of the founders first backed by YC.

"Why the change? Because YC needs to grow, and I'm not the best person to grow it. Sam is what YC needs at this stage in its evolution," Graham wrote in a blog post. "I'm convinced there's a fundamental change happening in the way work gets done. It's becoming normal to start a startup. There will be a lot more startups in 10 years than there are now, and if YC is going to fund them, we'll have to grow proportionally bigger."

Graham is a fixture in the Silicon Valley startup scene. While some of his recent comments about foreign accents and woman entrepreneurs have stirred some controversy, YC is known for helping launch some of the Valley's most well-known startups, including Reddit, Airbnb, and Dropbox.